By Marc Courtenay
While many property managers may be distracted by and entertained with the political elections in the U.S., now may be an auspicious time to shift our focus. How about two disparate attention targets?
First, how do the presidential elections impact the cost of housing? My research found that residential real estate prices usually falls during a closely contested presidential election year. This is also the case in the final year of a two-term presidency. In fact, if we look at the transitional years of 2000 and 2008 it becomes more obvious that this year may be a housing market depressant.
Despite the lowest interest and mortgage rates ever, housing in the hottest markets like New York City, the San Francisco Bay Area, and Seattle in the Pacific Northwest have already cooled down. What’s caused the drop? There are many factors including high prices and fewer qualified buyers. The economies of these ebullient areas helped support strong prices, but are they sustainable?
Also, Presidential elections usually point to big potential changes in economic and housing policies. The uncertainty tends to scare many real estate buyers and dissuade over leveraged investors. The tighter the election, the more investor unease, and buyers often sit on the sidelines until the election is over. This year’s presidential candidates are keeping this “anxiety index” to a boil. When all the votes are tallied, and if the Fed finally continues its interest rate increases, housing prices may actually drop about 2% for 2016 according to a number of industry experts. This isn’t abnormal.
No one that I’m aware of is calling for a housing bust like we experienced in 2007 through 2009. Like so many bubbles, the real estate market may be ready for a systemic pullback. Be ready for opportunities.
Now we’ll shift our attention to ideas about landscaping in autumn. A well-maintained, attractive property will keep and attract residents almost as much as a great location or a fresh coat of paint.
The falling leaves of election season need to be raked and removed. Keep your lawn areas green with a careful sprinkling of a good quality organic fertilizer. Simply said, don’t put off your lawn maintenance.
